All y’all (I’m in the Bayou City, y’all) tell war stories about clients, or have heard them ad nauseum. Today we have an addition for the war stories of the Lead of The Jersey Boys, who got trounced by Judge Halpern for trying to help.

See my blogpost “No Good Deed,” 5/5/17.

Today I withdraw the reticence I manifested in that blogpost. Today we have Clark J. Gebman and Rebecca Gebman, leading off the 2020 T. C. Memos. with 2020 T. C. Memo 1, 1/2/20.

I bet you didn’t know Rebecca was a lawyer. And still is, according to Our Fair State’s Office of Court Administration website. But she was admitted to the Bar in 2004, Judge Nega, not 2000, according to the same source. I wonder if the Jersey Boys knew it; somehow I doubt it.

Judge Nega thoroughly shreds the Gebmans’ claimed deductions and exclusions, and NOL carryforward.

Of course Rebecca wants innocent spousery, but she was the only one with income for the years at issue. “Mr. Gebman did not have a paying job during the years at issue and earned no income. He managed, controlled, and collected rent from their jointly owned properties.” 2020 T. C. Memo. 1, at p. 7.

So Section 6015(b) apportioned relief is out of the question. The items are all Rebecca’s. And 6015(f) equity is a laugher. “…it would not be equitable to relieve Mrs. Gebman from liability on her own items of income while leaving Mr. Gebman responsible for paying the tax. Nor would it be equitable to have respondent try to collect the joint liability only from Mr. Gebman, who has professed his intention to file for bankruptcy.“ 2020 T. C. Memo. 1, at p. 15.

Judge Nega isn’t through.

“Although Mrs. Gebman argues that Mr. Gebman was in charge of filing the tax returns and that he assured her that he was taking care of the cases before this Court, she did not provide any additional evidence that she is entitled to relief. Mrs. Gebman does not allege that Mr. Gebman, in any way, prevented her from reviewing the tax returns, was not interested in her views about the cases, or otherwise discouraged her participation in the cases. Moreover, she admits to voluntarily delegating tax return preparation to her husband. Mrs. Gebman’s actions lead to the conclusion that she may have simply chosen to turn a blind eye to the tax returns. Furthermore, there is nothing in the record that indicates Mr. Gebman tried to deceive or hide anything from Mrs. Gebman. He never concealed any financial dealings, bank accounts, or business operations from her. Finally, Mr. Gebman and Mrs. Gebman are still married and have continuously lived together. Mrs. Gebman did not provide any evidence that persuades us that she meets the requirements for relief.” 2020 T. C. Memo. 1, at pp. 16-17.

But neither are Clark nor Rebecca through. They’re in the zone for a Section 6673 frivolity chop.

“The Court has provided ample warnings to petitioners of the potential implications of continuing to assert frivolous and groundless arguments. For example, petitioners’ various frivolous arguments include that they are victims of criminal conspiracies and that they request alleviation of restraint of trade. During trial petitioners persisted in asserting frivolous and groundless arguments, despite previous warnings from respondent’s counsel and this Court.” 2020 T. C. Memo. 1, at p. 20. (Footnote omitted, but I’m coming to it; it’s really the Luxardos in the Manhattan).

“At trial, with Mrs. Gebman’s silent assent Mr. Gebman spoke about the Federal Reserve; spoke about the activities of Benjamin Strong, who directed the original World War I gold transfer to London; told the story about America’s economic hedging; requested that this Court refer these cases to the Federal Bureau of Investigation; addressed the Federal Election Committee and the State Board of Elections; and talked about the Supreme Court and Teddy Roosevelt. Mr. Gebman advanced many other similar arguments during trial.” 2020 T. C. Memo. 1, at pp. 20-21, Footnote 9.

$2500 to Clark and Rebecca.

I’m sure the Jersey Boys will be well pleased to have gotten rid of those clients.

Finishing up the title of this blogpost, if you have lots of time, I’ll tell you about the Swedish Joan of Arc and her larcenous husband, or about the landfill in Richmond County and the respected gentlemen who oversaw the same. And how glad I am that I survived them, with life, liberty and license intact.

I didn’t blog Ames D. Ray, Docket No. 14051-16, filed 1/2/20, when he starred in 2019 T. C. Memo. 36, 4/15/19. It was another activity-for-production-of-income masquerading as a trade-or-business. I’ll spare you the account of Ames’ domestic upheavals and his fruitless and bootless trudge through the Courts of my Native State; Judge Nega has it in extenso in his opinion.

Ames’ trusty attorney is a wee bit late with his Rule 161 reconsideration motion…like 189 days late. Rule 161 gives 30 days “unless the Court shall otherwise permit.” And apparently trusty attorney never asked. So Ames could be out on time alone.

But clearly there’s more, or I wouldn’t be wasting your time or mine. Since Ames’ trial came during the great Graev hiatus, IRS needed (and got) a reopener to put in evidence of the Section 6751(b) Boss Hossery.

Ames wants to challenge the credibility of the IRS’ declarant, whose declaration was given to support the wild-carded Boss Hossery.

Except.

“…the Court issued an Order affording petitioner the opportunity to serve on respondent interrogatories consistent with Rule 71….That Order also directed respondent to serve on petitioner answers to such interrogatories and file with the Court a status report indicating the then current status of this case….” Order, at p. 4.

But neither Ames nor trusty attorney served such interrogs. IRS stated in its status report that they had asked trusty attorney if he was going to serve interrogs, and trusty attorney said “no.”

“We are unpersuaded by petitioner’s credibility argument, especially in the light of petitioner’s decision not to engage in additional discovery with respect to that issue.” 2019 T. C. Memo. 36, at p. 25, footnote 6; see also Order, at p. 4.

Takeaway- If you get a chance for more discovery, and there’s any chance that chance could help your case, take it. And tell ‘em Ames sent you.

As I struggle through this year’s bout with the flu while visiting nearest and dearest in The Bayou City, it seems another condition, which I had long lamented, turns out to be contagious.

I regret to report that Ch J Maurice B. (“Mighty Mo”) Foley has contracted the letter-motion from ex-Ch J L Paige (“Iron Fist”) Marvel. Here’s William A. Jacob & Rita V. Jacob, Docket No. 18269-19S, filed 1/2/20.

“Susan L. Crum filed a Letter on Behalf of William A. and Rita V. Jacob, and attached thereto a copy of a ‘No Change’ letter… issued to petitioners for [year at issue]. Since, by law, the Court cannot close a deficiency case over which it has jurisdiction without entering a decision as to the amount due, if any, we shall recharacterize the Letter as a Motion for Entry of Decision.” Order, at p. 1.

A quick docket search shows Bill & Rita are pro sese, and there’s no entry of appearance for any attorney or USTCP. It is just possible that Susan L. is an attorney awaiting Tax Court admission (although an internet search shows no attorney by that name). Possibly Susan L. is one of the few, the happy few, who passed the brutal admission exam and is awaiting admission. In the latter case, it’s strange that Susan L. hasn’t finished her paperwork, as the last time the test for non-attorneys was given was November, 2018. She’s had months to get the paperwork done and in.

And “CPA” is missing from Susan L.’s name.

Looks like the condition has mutated from “C.P.A. = USTCP” to “Anybody = USTCP.” And is still contagious.

Tax Court is closing out the year 2019 on a distinctly diminuendo note. No opinions or designated hitters.

So your blogger is thrown back on an old theme, repeated again by Theodore Lee Croker, Docket No. 9070-18S, filed 12/31/19.

The last date for Theo to petition was May 7, 2018. And he did. Only his petition got to USTC on May 9. And that’s too late.

Theo was, of course, pro se. Theo used FedEx Express Saver. We all know that FedEx Express Saver is not one of the “blessed communion, fellowship divine,” blessed by the Com’r per Notice 2016-30, 2016-18 I.R.B. 676.

See my blogpost “The Grating Roar of Pebbles,” 12/6/18. Not every service offered by FedEx, UPS or DHL qualifies for Section 7502 “mailed-is-filed” treatment.

As I said a year ago, “(T)he statutory and regulatory grand slalom through which any PDS must go to certify one of its services … guarantees that none of the Big Three will bother to add any service to the blessed communion. Why should they spend one minute or one cent on a process that will add nothing to their respective bottom lines? If the hapless pro se or ill-informed practitioner uses the wrong option, the PDS got paid, and xin loi about the toss. The only injured parties are the pro sese with meritorious claims that get tossed on a ridiculous hyper-technicality.”

And their cheapo services are certainly not worth adding, when only their premium services are IRS-qualified.

Happy New Year.

Although some municipalities will fine you if you pick up abandoned furniture from the curb (they make money from salvaging), some such has found its way into many a flat in Our Fair City. Perhaps the item was even refurbished somewhat.

Today, Ch J Maurice B (“Mighty Mo”) Foley, alerted by some means to an item left at curbside yesterday, undertakes to refurbish same.

Here, once again, is Maria R. Manzanarez, Docket No. 19592-18, filed 12/30/19.

Correcting my blogpost “Kicked to the Curb,” 12/29/19, Ch J Mighty Mo says as follows.

“It has come to the Court’s attention that the Order dated December 26, 2019, may have been unclear. Accordingly, upon due consideration, it is

“ORDERED that the Court’s Order dated December 26, 2019, is amended in that the Ordered paragraph is deemed to read as follows:

“’ORDERED that the name of the street in petitioner’s address is corrected on the Court’s records to be: Berkley Avenue.’”

Melissa Featherston Lecour & Glenn Lecour, 22905-18L, filed 12/30/19, want an IA. But they need a year to straighten out their living expenses. And the AO on their case (self-reported taxes assessed) was a trifle casual with the IRM’s prescriptions.

So no summary J for IRS.

“Petitioners timely filed a petition requesting review of the notices of determination asserting that the IRS did not properly calculate petitioners’ ability to pay their outstanding Federal tax liabilities and that ‘[t]he IRM specifically directs that respondent shall allow a taxpayer one year to reorganize living expenses to meet petitioners’ allowable personal living expense standards.’ Petitioners further allege that ‘Respondent’s allowable personal living expense calculation does not permit respondent such one year period, for all claimed expenses.’” Order, at p. 3.

Ex-CSTJ Peter Panuthos: “We have held that an Appeals officer properly exercises his or her discretion by adhering to IRM provisions governing acceptance of collection alternatives. The IRM provides that settlement officers should allow taxpayers the national standard amount for their family size without questioning the amount actually spent. See IRM pt. 5.15.1.9(2) and (7) (Aug.29,2018). For housing, utilities, and vehicle expenses, taxpayers are allowed the local standard amounts unless they have claimed lesser amounts. See IRM pt. 5.15.1.10(1)(a.) and (b.). The IRM further advises that all deviations from the national and local standards must be ‘verified, reasonable and documented in the case history.’” See IRM pts. 5.15.1.9(4), and 5.15.1.10(1)(a.) and (b.).” Order, at pp. 4-5.

Seems clear enough, no? And Tax Court’s scope of review is abuse-of-discretion, not de novo. So ex-CSTJ Panuthos isn’t going to recalculate the AO’s number.

But ex-CSTJ Panuthos is a sidewalks-of-New York lawyer, and if he can’t find an ambiguity in a NOD, nobody can.

“Contrary to IRM guidelines, the Notice of Determination does not supply, and respondent’s motion and supporting declaration do not elucidate, any explanation for (1) the amounts used when calculating petitioners’ allowable expenses and whether they deviate from the local and national standards, or (2) the calculation of petitioners’ ability to pay for the initial 12-month period. Because the record demonstrates a departure from administrative guidelines without a full and clear explanation of the AO’s reasoning, there is a genuine issue of fact in this case and summary judgment is inappropriate.” Order, at p. 5.

Takeaway- Add the one-year reset to your AI toolkit. If it isn’t there already.

Maria R. Manzanarez, Docket No. 19592-18, filed 12/27/19, may find her correspondence from 400 Second Street, NW, on the pavement, since Ch J Maurice B (“Mighty Mo”) ordered the following.

“ORDERED that petitioner’s address is changed in that mail shall be sent to the street Berkley.” Order, at p. 1. (Emphasis by the Court).

A benevolent Congress having expanded the scope of Tax Court review of innocent spousery, ex-Ch J L Paige (“Iron Fist”) Marvel obliges us today with a checklist for the petitioner seeking Section 6015 relief. She expands and expatiates on the checklist of her predecessor, ex-Ch J Michael B (“Iron Mike”) Thornton; see my blogpost “First Checklist for Innocent Spouser,” 11/4/19.

Ilya Iussa, Docket No. 24775-18, filed 12/27/18, is a beneficiary of ex-Ch J Iron Fist’s precision.

First, let petitioner and IRS stip out whatever they can, especially the contents of the administrative record, which led to the denial or abridgment of the relief sought.

But if they cannot, the petitioner needs to make a list like this.

“(1) the reasons why she disagrees with the administrative record as submitted by respondent and, if applicable, what documents she believes should be included in or excluded from the administrative record; (2) whether she plans to introduce evidence outside the administrative record and, if so, on what basis; and (3) whether she believes that a trial is necessary and, if so, why.” Order, at p. 2.

Read and heed.

Antoine A. Johnson, Docket No. 17324-18, filed 12/26/19, doesn’t mind if Bank of America hands over some papers to IRS before he goes to trial on the 1099-C BoA gave him. Antoine claims someone stole his bankcard and ran up a lot of debt. IRS gave BoA a trial subpoena (Form 14), but quite reasonably wants the stuff sooner, and moves for an earlier response.

BoA won’t do anything sooner than the subpoena requires unless a judge tells them, and Form 14 says show up at USTC on the trial date with the stuff.

“Given that the Form 14 subpoena duces tecum expressly directs the subpoenaed person to produce documents on the date of the calendar call, respondent is unable, without Court approval, to specify a date other than the calendar call date. Respondent’s motion would ensure receipt of the subpoenaed documents with sufficient time to review them and pursue further inquiry in the event the documents produced are either not in full compliance with the subpoena or otherwise contain information that may lead to discovery of more relevant information.” Order, at p. 2.

Makes sense. If Antoine is right, then some or all of the debt BoA relieved wasn’t his, so the SNOD is reduced or invalid. And checking it out pre-trial will save a lot of time, because if the stuff only shows up at trial, a lot of scarce judicial resources will be wasted as counsel and Antoine go over the stuff page by page.

But that Obliging Jurist, Judge David Gustafson, won’t agree to a change of the date whereon BoA’s person shows up with the stuff for IRS to eyeball.

Rule 147 allows for subpoenas duces tecum when deposing a nonparty, but unlike FRCP 45 (a)(1)(A) and (c)(2)(A), Rule 147 makes no provision for a subpoena duces tecum to non-parties for documents alone.

And unlike the stealth subpoena issue, which I’ve blogged in extenso, Judge Gustafson thinks that Congress has formally handcuffed pore l’il ole Tax Court.

Section 7456(a)(1) gives Tax Court judges the power to require production of documents “at any designated place of hearing.”

“A Tax Court litigant may serve on a third party a subpoena to produce documents at a trial session and, at that session, may call on the Court to enforce the subpoena. A litigant who has served such a subpoena may ask the third party to voluntarily produce the documents in advance of the trial session and, if the third complies, excuse him from appearing at the trial session. A litigant who has served such a subpoena may also ask the Court to attempt a telephone conference with the parties and with counsel for the third party for the purpose of encouraging such voluntary production of documents. But given the wording of section 7456(a), we do not authorize the service of a subpoena of the sort that the Commissioner here requests.” Order, at p. 3.

It’s easy to blame BoA for not playing nice, but it’s not their pony and it’s not their horserace. BoA has bank secrecy laws to consider. Since Antoine is pro se, any consent of his to handing over the stuff is hardly informed consent. A judicial subpoena clears their decks of any liability to Antoine or anyone else.

Pore l’il ole Tax Court, step-child of Congress.

Everything West of the Hudson Is Kansas

It’s been a while since I’ve gone geographical on this my blog, but with Christmas cheer lingering on, I turn to Phil W. Baxter & Betty C. Baxter, Docket No. 22250-19, filed 12/26/19.

See my blogpost “Everything West of the Hudson Is Kansas,” 7/5/17.

Phil & Betty never filed Form 5, Request for Place of Trial with their petition, a common omission that lately necessitates more than one-third of the Court’s orders, sending non-filers (of Form 5) hither and thither to try their cases at what Ch J Maurice B (“Mighty Mo”) Foley thinks is the most convenient venue.

Given the volume of such orders, it’s not surprising that Phil & Betty are sent off to “Nashville, TX” [sic] to seek redress for their grievances.

Unfortunately, unless the list in Rev. 9/10 of Form 5 has been amended and the amendment not yet made it onto the forms page of the USTC website, Tax Court does not sit in Nashville, TX, which my informant tells me is a/k/a Nashville-on-the-Brazos, in Milam County, TX. I am also informed that Nashville, TX is now a ghost town.

Some litigants might prefer such a locale, but I expect that Phil & Betty would prefer Nashville, TN. Better options for coffee and doughnuts on the morning of calendar call in Opryland.